Weekend reading: Charlie Munger on banking regulation

My regular musings on the week’s best article, followed by other great posts and pieces.

There are three big themes in the papers this weekend, and we’ve already covered them all on Monevator:

• The Liberal and Conservative Coalition
• Likely tax changes in the upcoming emergency budget
• The Greek crisis (it’s a buying opportunity in my view)

Suffice to say, I’ve kept re-investing more of my recently liberated cash into cheaper stocks. I also finally bought some preference shares for my ISA – Natwest ones yielding nearly 9%. I’ll try to write about them soon.

Instead of repeating myself on Greece and the market gyrations, I’d like to highlight a Motley Fool article featuring quotes from the great Charlie Munger.

Munger is the self-made billionaire sidekick of Warren Buffett at Berkshire Hathaway. He’s the thinking man’s Buffett. I could read Munger all day, and not only because he agrees with me about bankers:

Most ambitious young men will be more aggressive than they should. That’s what happened with investment banking. I mean, look at Lehman Brothers. Everyone did what they damn well wanted until the whole place was pathological about its extremeness.

When Hitler was in his bunker before he shot himself, he said, “This isn’t my fault. The German people just don’t appreciate me enough.”

That’s the attitude of a lot of bankers. They think their silliness is necessary. Banks will not rein themselves in voluntarily. You need adult supervision.

I could quote the whole article for Munger’s comments on everything from how close we came to economic collapse to business success. But then I’d get sued by The Motley Fool.

Instead, I’ll end with this great quote on the ‘work’ of investing:

Learning has never been work for me. It’s play. I was born innately curious. If that doesn’t work for you, figure out your own damn system.

Old guys: you’ve got to love them! If you missed my piece on Munger’s wrinkly contemporary Walter Schloss last week, go read it, too. (I also wrote about how to use a watchlist).

Finally, I’m out of bed and my back is nearly better. Thanks for the kind comments and emails.

Blog posts about money and investing

• Why markets crash – The Psy-Fi blog
• A history of market crashes – Cassandra Does Tokyo
• The private investor has never had it better – Kid Dynamite
• If you’re so smart, why are you trying to beat the market? – The Munro Fund
• Gold as an inflation hedge? – Stock Tickle
• Leave investing to the pros [I disagree!] – Mr CC on Investor Junkie
• Tracking your net worth – The Digerati Life
• You can have what you want, but not everything – Simple Living in Suffolk
• Jobs I’d do for free – Financial Samurai

Useful articles from the big boys

• The role of poor numeracy in America’s housing bust – The Economist
• Investors expected to sell ahead of higher CGT – FT
• More on the emergency budget tax changes to come – FT
• New first-time buyer mortgages from the Post Office… – FT
• …it’s also offering a 4.1% three-year fixed bond – The Telegraph
• Rents growing faster than house prices – The Telegraph
• The average household has £237,000 in assets – The Telegraph
• The coalition statement and the wider economy – The Telegraph
• Compulsory annuities at 75 to be scrapped – This is Money
• The real reason for the ‘flash crash’ (no buyers) – Business Insider
• Spending cuts? Buy UK equities, says Goldman Sachs – Stock Tickle
• Lots of reasons to avoid gold – Business Insider
• The Warren Buffett bubble – Bloomberg
• And finally, some good news on North Sea cod! 🙂 – The Independent

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